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Copart Reports Fourth Quarter Financial Results

FAIRFIELD, Calif.--Copart, Inc. today reported the results for its fourth quarter and fiscal year ended July 31, 2010.

For the three months ended July 31, 2010, revenue, operating income and income from continuing operations were $190.5 million, $57.2 million and $36.2 million, respectively. These represent increases in revenue of $6.1 million, or 3.3%; in operating income of $1.8 million, or 3.3%; and in income from continuing operations of $1.6 million, or 4.6%, from the same quarter last year. Fully diluted earnings per share from continuing operations for the three months were $0.43 compared to $0.41 last year, an increase of 4.9%.

For the twelve months ended July 31, 2010, revenue, operating income and income from continuing operations were $772.9 million, $239.1 million and $151.6 million, respectively. These represent increases in revenue of $29.8 million, or 4.0%; in operating income of $13.7, million, or 6.1%; and in income from continuing operations of $12.1 million, or 8.7%, from the same period last year. Fully diluted earnings per share from continuing operations for the twelve months ended July 31, 2010 were $1.78 compared to $1.64 last year, an increase of 8.5%.

On Thursday, September 23, 2010, at 11 a.m. Eastern time, Copart will conduct a conference call to discuss the results for the quarter. The call will be webcast live at http://w.on24.com/r.htm?e=239442&s=1&k=09F03353ABE9E2E841847078E85519F5. A replay of the call will be available through October 23, 2010 by calling (888) 203-1112. Use confirmation code #1712540.

About Copart

Copart, founded in 1982, provides vehicle sellers with a full range of remarketing services to process and sell salvage and clean title vehicles to dealers, dismantlers, rebuilders, exporters and, in some states, to end users. Copart remarkets the vehicles through Internet sales utilizing its patented VB2 technology. Copart sells vehicles on behalf of insurance companies, banks, finance companies, fleet operators, dealers, car dealerships, the general public and others. The Company currently operates 153 facilities in the United States, Canada and the United Kingdom. Salvage vehicles are either damaged vehicles deemed a total loss for insurance or business purposes or are recovered stolen vehicles for which an insurance settlement with the vehicle owner has already been made. For more information, or to become a member, visit www.copart.com.

Cautionary Note About Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, and these forward-looking statements are subject to substantial risks and uncertainties. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected or implied by our statements and comments. For a more complete discussion of the risks that could affect our business, please review the “Management's Discussion and Analysis�?? and the other risks identified in Copart’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission. We encourage investors to review these disclosures carefully. We do not undertake to update any forward-looking statement that may be made from time to time on our behalf.

Copart, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)

           

Three months ended

July 31,

Twelve months ended

July 31,

2010     2009   2010   2009
Net sales and revenue:
Service revenues $ 158,391 $ 151,340 $ 642,134 $ 615,352
Vehicle sales   32,077   32,992   130,745   127,730

Total service revenues and vehicle

sales

$ 190,468 $ 184,332 $ 772,879 $ 743,082
Operating costs and expenses:
Yard operations 68,465 70,505 285,271 291,991
Cost of vehicle sales 26,627 25,509 104,673 106,029
Yard depreciation and amortization 9,152 8,389 34,941 32,802
Gross margin 86,224 79,929 347,994 312,260
General and administrative 27,016 22,379 100,634 77,890
General and administrative depreciation and amortization 1,988 2,162 8,290 9,045
Total operating expenses 133,248 128,944 533,809 517,757
Operating income 57,220 55,388 239,070 225,325
Other income (expense):
Interest income (expense), net 31 (51

)

 

(11

)

 

1,418
Other income 436 997 436 989
Total other income 467 946 425 2,407
Income from continuing operations before income taxes 57,687 56,334 239,495 227,732
Income taxes 21,453 21,708 87,868 88,186
Income from continuing operations 36,234 34,626 151,627 139,546
Discontinued operations:
Income from discontinued operations,

net of income tax effects

  —   —   —   1,557
Net income $ 36,234 $ 34,626 $ 151,627 $ 141,103
Earnings per share-basic
Income from continuing operations $ 0.43 $ 0.41 $ 1.80 $ 1.67
Income from discontinued operations   —   —   —   0.02
Basic net income per share $ 0.43 $ 0.41 $ 1.80 $ 1.69
 
Weighted average common shares outstanding 84,284 83,794 84,165 83,537
 
Earnings per share-diluted
Income from continuing operations $ 0.43 $ 0.41 $ 1.78 $ 1.64
Income from discontinued operations   —   —   —   0.02
Diluted net income per share $ 0.43 $ 0.41 $ 1.78 $ 1.66
Weighted average common shares and dilutive potential common shares outstanding 85,087 84,214 85,027 84,930
 
 

Copart, Inc.

Consolidated Balance Sheets

(in thousands)

(Unaudited)

           
July 31,

2010

July 31,

2009

ASSETS
 
Current assets:
Cash and cash equivalents $ 268,188 $ 162,691
Accounts receivable, net 109,061 109,248
Inventories and vehicle pooling costs 34,866 33,352
Income taxes receivable 10,958 5,426
Prepaid expenses and other assets 14,342 5,216
Total current assets 437,415 315,933
Property and equipment, net 573,514 530,886
Intangibles, net 13,016 15,212
Goodwill 175,870 166,327
Deferred income taxes 10,213 7,759
Other assets 18,784 21,915
Total assets $ 1,228,812 $ 1,058,032
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 93,740 $ 82,773
Deferred revenue 10,642 13,165
Income taxes payable 1,314 5,269
Deferred income taxes 1,154 1,948
Other current liabilities 374 429
Total current liabilities 107,224 103,584
Deferred income taxes 9,748 10,997
Income taxes payable 23,369 20,266
Other liabilities 1,237 1,726
Total liabilities 141,578 136,573
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value - 180,000 shares authorized; 84,363 and 83,939 shares issued and outstanding at July 31, 2010 and July 31, 2009, respectively 365,507 334,440
Accumulated other comprehensive loss (32,741) (27,082)
Retained earnings 754,468 614,101
Total shareholders’ equity 1,087,234 921,459
Total liabilities and shareholders’ equity $ 1,228,812 $ 1,058,032
 
 

Copart, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

     
Twelve months ended
July 31,
2010     2009
Cash flows from operating activities:
Net income $ 151,627 $ 141,103
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations — (2,440 )
Depreciation and amortization 43,242 41,354
Allowance for doubtful accounts 442 (174 )
Deferred rent (440 ) (1,171 )
Share-based compensation 17,955 9,413
Excess tax benefits from stock-based compensation (5,643 ) (4,570 )
Loss on sale of property and equipment and real estate impairment 659 647
Deferred income taxes (4,512 ) (2,393 )
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable 2,436 982
Vehicle pooling costs (1,210 ) 1,361
Inventory (256 ) (54 )
Prepaid expenses and other current assets (8,896 ) 1,376
Other assets 311 (6,386 )
Accounts payable and accrued liabilities 8,098 (2,479 )
Deferred revenue (2,527 ) (1,324 )
Income taxes receivable 861 18,021
Income taxes payable (2,740 ) 10,073
Net cash provided by operating activities 199,407 203,339
 
Cash flows from investing activities:
Principal payments from (issuance of) notes receivable (1,300 ) 12,000
Purchases of property and equipment including acquisitions (75,840 ) (78,912 )
Proceeds from sale of property and equipment 2,477 7,008
Purchases of assets and liabilities in connection with acquisition, net of

cash acquired

(21,362 ) —
Net cash used in investing activities (96,025 ) (59,904 )
 
Cash flows from financing activities:
Proceeds from the exercise of stock options 6,285 3,119
Proceeds from the issuance of Employee Stock Purchase Plan shares 2,044 1,942
Repurchase of common stock (12,706 ) (9,769 )
Excess tax benefit from share-based payment arrangements 5,643 4,570
Change in book overdraft — (17,502 )
Net cash provided by (used in) financing activities 1,266 (17,640 )
 
Effect of foreign currency translation 849 (2,058 )
 
Net increase in cash and cash equivalents 105,497 123,737
 
Cash and cash equivalents at beginning of period 162,691 38,954
Cash and cash equivalents at end of period $ 268,188 $ 162,691
 
Supplemental disclosure of cash flow information:
Interest paid $ 216 $ 353
Income taxes paid $ 93,989 $ 71,908